TCS Analysts Presentation Q3 FY 2013-14

1. TCS Financial Results
Quarter III FY 2013 - 14
16th Jan 2014
Copyright © 2012 Tata Consultancy Services Limited
16th Jan 2014
1

2. Disclaimer
Certain statements in this release concerning our future prospects are forward-looking
statements. Forward-looking statements by their nature involve a number of risks and
uncertainties that could cause actual results to differ materially from market expectations.
These risks and uncertainties include, but are not limited to our ability to manage growth,
intense competition among Indian and overseas IT services companies, various factors
which may affect our cost advantage, such as wage increases or an appreciating Rupee,
our ability to attract and retain highly skilled professionals, time and cost overruns on
fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration,
our ability to manage our international operations, reduced demand for technology in our
key focus areas, disruptions in telecommunication networks, our ability to successfully
complete and integrate potential acquisitions, liability for damages on our service
contracts, the success of the companies in which TCS has made strategic investments,
withdrawal of governmental fiscal incentives, political instability, legal restrictions on
raising capital or acquiring companies outside India, unauthorized use of our intellectual
property and general economic conditions affecting our industry. TCS may, from time to
time, make additional written and oral forward-looking statements, including our reports
to shareholders. These forward-looking statements represent only the Company’s current
intentions, beliefs or expectations, and any forward-looking statement speaks only as of
the date on which it was made. The Company assumes no obligation to revise or update
any forward-looking statements.
16th Jan 2014
2

3. Highlights

4. Q3 FY14 Performance Highlights
 Revenue:
- INR Revenue of `212,940 Mn, growth of 1.5% QoQ and 32.5% YoY
- USD Revenue of $3,438 Mn, growth of 3.0% QoQ and 16.6% YoY
- International Revenue growth of 2.9% in CC and 3.8% in USD
 Profit:
- Operating Income at ` 63,347 Mn, Operating Margin of 29.7%
- Net Income at ` 53,140 Mn, Net Margin of 25.0%
 Demand:
- Clients in $50M+ revenue band increased by 2 and in $20M+ revenue band
increased by 4
- Strong growth in Manufacturing, Telecom and Life Sciences
 People:
- Gross addition of 14,663 associates, closing headcount: 290,713
- Utilization at 84.3% (ex-trainees) and 77.5% (including trainees)
16th Jan 2014
4

5. Financial Performance

6. Growth Summary (INR)
160,699
164,301
179,871
Y-0-Y Growth
209,772
34.3%
21.7%
23.9%
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q3 FY13
2.2%
Q4 FY13
43,809
43,584
Q4 FY13
48,627
13.4%
Q1 FY14
EBITDA
46,541
46,599
Q2 FY14
Q3 FY14
Q3 FY13
13.7%
Q1 FY14
Q1 FY14
Q2 FY14
Q3 FY14
Q3 FY13
19.0%
28.8%
35,968
Q1 FY14
Q-o-Q Growth
49.6%
23.0%
37,962
Q1 FY14
Q2 FY14
Q3 FY14
33.9%
`
Q4 FY13
Q2 FY14
53,140
1.1%
Q3 FY13
0.7%
10.6%
47,018
35,516
43.7%
18.9%
0.1%
Q4 FY13
Q3 FY14
Q-o-Q Growth
Y-o-Y Growth
Net Income
Q2 FY14
49.5%
51,532
`
Q4 FY13
Q4 FY13
0.1%
11.6%
-0.5%
44.6%
30.2%
18.9%
66,865
4.8%
Q3 FY13
18.6%
Q3 FY14
Q-o-Q Growth
Y-o-Y Growth
66,390
Q2 FY14
51.5%
4.8%
Q3 FY13
Q1 FY14
63,347
`
Million
63,295
1.5%
9.5%
Y-o-Y Growth
Operating Income
Million
32.5%
21.0%
16.6%
2.9%
Q3 FY13
Million
Q-0-Q Growth
212,940
`
Million
Revenue
Q3 FY14
Q3 FY13
22.1%
1.3%
Q4 FY13
15.7%
5.5%
Q1 FY14
23.9%
Q2 FY14
13.0%
Q3 FY14
16th Jan 2014
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7. Growth Summary (USD)
Revenue
Y-o-Y Growth
3,337
3,165
3,438
Q-o-Q Growth
14.0%
Million
$
Q4 FY13
Q1 FY14
Q2 FY14
16.0%
17.0%
3.1%
4.1%
5.4%
Q3 FY13
Q3 FY13
14.8%
3.3%
2,948
3,040
Q4 FY13
806
Y-o-Y Growth
31.9%
5.3%
Q3 FY13
Q4 FY13
27.3%
856
6.3%
Q3 FY13
Q3 FY14
Q-o-Q Growth
1,023
$
Million
804
Q2 FY14
3.0%
Q3 FY14
Operating Income
1,007
Q1 FY14
16.6%
Q1 FY14
Q2 FY14
9.8%
0.3%
Q4 FY13
14.0%
17.7%
6.1%
Q1 FY14
1.6%
Q2 FY14
Q3 FY14
Q3 FY14
Y-o-Y Growth
Net Income
Q-o-Q Growth
31.7%
652
663
668
14.7%
748
1.4%
$
Million
858
Q3 FY13
Q3 FY13
Q4 FY13
Q1 FY14
Q2 FY14
12.9%
1.8%
Q4 FY13
16.4%
10.6%
0.7%
Q1 FY14
12.0%
Q2 FY14
14.7%
Q3 FY14
Q3 FY14
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8. Operational Performance

9. Growth by Market
2.2%
7.4%
North America
6.3%
Latin America
11.6%
UK
52.7%
Continental Europe
India
17.5%
Asia Pacific
MEA
2.3%
Geography (% )
Q3 FY14
Q2 FY14
Q-o-Q
Growth
Q3 FY13
Y-o-Y
Growth
Americas
North America
52.7
53.2
0.6
53.6
30.3
Latin America
2.3
2.3
3.1
2.2
37.9
UK
17.5
17.3
2.9
17.5
33.0
Continental Europe
11.6
11.2
5.9
9.4
63.5
India
6.3
6.9
-8.6
7.7
7.9
Asia Pacific
7.4
7.1
5.3
7.5
29.9
MEA
2.2
2.0
9.8
2.1
38.3
Total
100.0
100.0
1.5
100.0
32.5
Europe
Growth in INR terms
Note: The growth rates reported here are based on actual revenues in INR. Calculating growth using the % Rev figures might result in some variance due to rounding error.
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10. Growth by Domain
3.5%
3.8%
2.3% 4.3%
BFSI
Telecom
5.9%
Retail & Distribution
42.7%
5.3%
Manufacturing
Hi-Tech
8.8%
Life Sciences & Healthcare
Travel & Hospitality
Energy & Utilities
13.8%
Media & Entertainment
9.6%
IP Revenue (%)
BFSI
Q3 FY14
Others
Q2 FY14
Q-o-Q
Growth
Q3 FY13
Y-o-Y
Growth
42.7
43.1
0.5
43.0
31.4
9.6
9.3
5.1
9.5
34.2
13.8
13.9
0.3
13.4
36.5
Manufacturing
8.8
8.4
6.1
8.5
36.9
Hi-Tech
5.3
5.4
0.2
5.8
22.5
Life Sciences & Healthcare
5.9
5.7
6.3
5.2
50.8
Travel & Hospitality
3.5
3.4
4.1
3.6
28.8
Energy & Utilities
3.8
3.8
0.2
3.8
31.6
Media & Entertainment
2.3
2.2
4.8
2.1
43.6
Others
4.3
4.8
-7.8
5.1
12.0
100.0
100.0
1.5
100.0
32.5
Telecom
Retail & Distribution
Total
Growth in INR terms
Note: The growth rates reported here are based on actual revenues in INR. Calculating growth using the % Rev figures might result in some variance due to rounding error.
16th Jan 2014
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11. Growth by Service Line
Application Development & Maint.
12.1%
2.3%
41.4%
Enterprise Solutions
3.4%
Assurance Services
12.0%
Engineering & Industrial Services
Infrastructure Services
4.6%
Global Consulting
Asset Leveraged Solutions
8.5%
Business Process Services
15.7%
SP Revenue (%)
Q3 FY14
Q2 FY14
Q-o-Q
Growth
Q3 FY13
Y-o-Y
Growth
IT Solutions and Services
Application Development & Maint.
41.4
41.7
0.7
42.4
29.4
Enterprise Solutions
15.7
15.4
3.5
15.1
37.4
Assurance Services
8.5
8.5
2.2
7.7
46.4
4.6
4.7
-0.6
4.7
31.5
12.0
11.8
3.0
11.7
36.3
Global Consulting
3.4
3.3
4.4
3.2
36.7
Asset Leveraged Solutions
2.3
2.7
-13.7
2.8
8.0
12.1
11.9
3.1
12.4
29.7
100.0
100.0
1.5
100.0
32.5
Engineering & Industrial Services
Infrastructure Services
Business Process Services
Total
Growth in INR terms
Note: The growth rates reported here are based on actual revenues in INR. Calculating growth using the % Rev figures might result in some variance due to rounding error.
16th Jan 2014
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12. Client Parameters
Q3 FY14
Q2 FY14
US$ 1m+ Clients
711
687
US$ 5m+ Clients
333
318
US$ 10m+ Clients
224
224
US$ 20m+ Clients
129
125
US$ 50m+ Clients
55
53
US$ 100m+ Clients
22
22
Clients Contribution *
*Last Twelve Months' services revenues
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13. Operational Parameters
Revenue %
Q3 FY14
Q2 FY14
Delivery Location
Local Delivery
46.8
46.5
Remote Delivery
53.2
53.5
5.4
5.4
47.8
48.1
Time & Material
48.3
48.5
Fixed Price & Time
51.7
51.5
Global DC
India DC
Contract Type
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14. Key Wins

Selected by a large global bank to provide ADM services for their payments and receivables
functions.

Engaged by a leading food and grocery retailer in North America as a strategic IT partner for all
application development, package implementation and Digital services

Awarded multi-year, multi-million dollar contract by a leading European pharmaceutical
company to provide drug safety services leveraging global delivery

Won multi-year engagement with a major North American telecom operator to provide
comprehensive mobile application lifecycle services for the development of a series of mobile
applications across all major mobile platforms integrated with network intelligence

Chosen by a global transportation conglomerate to provide remote infrastructure managed
services for its worldwide operations across its group companies

Selected by one of the market leaders in information services industry to accelerate its ERP
transformation roadmap and provide service transformation to a large portfolio of applications

Engaged by a leading North America based diversified industrial manufacturer to transform back
office operations in Finance and accounting
16th Jan 2014
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15. Human Resources

16. Total Employee Base
Total Employees : 290,713
290,713
285,250
276,196
277,586
263,637
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
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17. Q3 Consolidated - Gross Additions 14,663 & Net Additions 5,463
Gross Additions:
• 6,342 Trainees & 5,490 Laterals in India
Attrition*:
• 10.9% (LTM), including BPS
• 2,831 employees overseas
• IT Services: 10.3% (LTM)
20,098
17,145
• BPS: 13.4% (LTM)
17,362
14,663
Utilization Rate*:
• 84.3% (excluding Trainees)
12,560
10,611
9,561
• 77.5% (including Trainees)
7,664
5,463
*
Excluding CMC & Diligenta
1,390
Diversity:
FY13 - Q3
FY13 - Q4
Gross Additions
FY14 - Q1
FY14 - Q2
Net Additions
FY14 - Q3
• Women employees: 32.5%
• Nationalities: 118
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18. Annexure

19. IFRS Income Statement
Consolidated IFRS
` Million
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
Revenue
212,940
209,772
160,699
100.00
100.00
100.00
Cost of revenue
110,257
109,048
86,208
51.78
51.98
53.65
Gross margin
102,683
100,724
74,491
48.22
48.02
46.35
SG & A expenses
39,336
37,429
30,682
18.47
17.85
19.09
Operating income
63,347
63,295
43,809
29.75
30.17
27.26
2,131
3.16
Other income (expense), net
6,729
(427)
(0.20)
1.33
Income before income taxes
70,076
62,868
45,940
32.91
29.97
28.59
Income taxes
16,524
15,563
10,025
7.76
7.42
6.24
Income after income taxes
53,552
47,305
35,915
25.15
22.55
22.35
412
287
399
0.19
0.14
0.25
53,140
47,018
35,516
24.96
22.41
22.10
27.13
24.00
18.15
Minority interest
Net income
Earnings per share in `
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20. COR – SG&A Details
COR
` Million
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
Employee cost
78,287
77,119
60,541
36.77
36.76
37.67
Fees to external consultants
13,192
12,390
9,020
6.20
5.91
5.61
Equipment & software
3,224
3,891
3,711
1.51
1.85
2.31
Depreciation
2,264
2,038
1,680
1.06
0.97
1.05
Travel
2,706
2,603
2,177
1.27
1.24
1.36
Communication
1,377
1,468
1,243
0.65
0.70
0.77
Facility expenses
4,189
4,065
3,344
1.97
1.94
2.08
Other expenses
5,018
5,474
4,492
2.35
2.61
2.80
110,257
109,048
86,208
51.78
51.98
53.65
Cost of Revenue
SGA
Employee cost
` Million
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
26,446
25,663
20,912
12.42
12.23
13.01
Fees to external consultants
440
900
764
0.20
0.43
0.48
Provision for Doubtful Debts
255
302
109
0.12
0.15
0.07
Depreciation
1,255
1,057
1,051
0.59
0.50
0.65
Facility expenses
2,958
2,722
2,534
1.39
1.30
1.58
Travel
2,771
2,313
1,835
1.30
1.10
1.14
Communication
744
714
614
0.35
0.34
0.38
Education, Recruitment and training
832
802
585
0.39
0.38
0.36
Marketing and Sales promotion
1,123
913
721
0.53
0.44
0.45
Other expenses
2,512
2,043
1,557
1.18
0.98
0.97
39,336
37,429
30,682
18.47
17.85
19.09
S G & A expenses
16th Jan 2014
20

21. IFRS Balance Sheet
Consolidated IFRS
31-Dec-13
` Million
31-Mar-13
` Million
%
%
Assets
Property and equipment
96,175
15.04
81,944
15.77
Intangible assets and Goodwill
42,229
6.60
35,063
6.75
174,825
27.35
140,956
27.13
Unbilled Revenues
42,293
6.62
31,410
6.05
Investments
83,653
13.09
20,402
3.93
Cash and Cash equivalents
17,158
2.68
18,432
3.55
Other current assets
96,961
15.17
113,352
21.81
Other non current assets
85,968
13.45
77,986
15.01
639,262
100.00
519,545
100.00
509,391
79.68
409,481
78.82
Redeemable Preference Shares
1,000
0.16
1,000
0.19
Long term borrowings
1,207
0.19
1,310
0.25
Short term borrowings
381
0.06
1,013
0.19
Other current liabilities
105,457
16.50
85,715
16.50
15,407
2.41
14,465
2.79
Minority Interest
6,419
1.00
6,561
1.26
Total Liabilities
639,262
100.00
519,545
100.00
Accounts Receivable
Total assets
Liabilities and Shareholders' Equity
Shareholders' Funds
Other non-current liabilities
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21

22. IFRS Income Statement – In USD
$ Million
Consolidated IFRS
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
Revenue
3,438
3,337
2,948
100.00
100.00
100.00
Cost of revenue
1,780
1,735
1,581
51.78
51.98
53.65
Gross margin
1,658
1,602
1,367
48.22
48.02
46.35
635
595
563
18.47
17.85
19.09
1,023
1,007
804
29.75
30.17
27.26
39
3.16
SG & A expenses
Operating income
Other income (expense), net
Income before income taxes
109
(7)
(0.20)
1.33
1,132
1,000
843
32.91
29.97
28.59
Income taxes
267
247
184
7.76
7.42
6.24
Income after income taxes
865
753
659
25.15
22.55
22.35
7
5
7
0.19
0.14
0.25
Net income
858
748
652
24.96
22.41
22.10
Earnings per share in $
0.44
0.38
0.33
Minority interest
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22

23. COR – SG&A Details – In USD
COR
Employee cost
$ Million
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
1,264
1,227
1,111
36.77
36.76
37.67
213
197
165
6.19
5.91
5.61
Equipment & software
52
62
68
1.51
1.85
2.30
Depreciation
36
33
31
1.06
0.97
1.05
Travel
44
41
40
1.27
1.24
1.36
Communication
22
23
23
0.65
0.70
0.78
Facility expenses
68
65
61
1.97
1.94
2.08
Other expenses
81
87
82
2.36
2.61
2.80
1,780
1,735
1,581
51.78
51.98
53.65
Fees to external consultants
Cost of Revenue
SGA
Employee cost
$ Million
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
427
408
384
12.42
12.23
13.01
Fees to external consultants
7
14
14
0.20
0.43
0.48
Provision for Doubtful Debts
4
5
2
0.12
0.15
0.07
Depreciation
20
17
19
0.59
0.50
0.65
Facility expenses
48
43
46
1.39
1.30
1.58
Travel
45
37
34
1.30
1.10
1.14
Communication
12
11
11
0.35
0.34
0.38
Education, Recruitment and training
13
13
11
0.39
0.38
0.36
Marketing and Sales promotion
18
14
13
0.53
0.44
0.45
Other expenses
41
33
29
1.18
0.98
0.97
635
595
563
18.47
17.85
19.09
S G & A expenses
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23

24. IFRS Balance Sheet in USD
Consolidated IFRS
31-Dec-13
$ Million
31-Mar-13
$ Million
%
%
Assets
Property and equipment
1,556
15.04
1,508
15.77
683
6.60
645
6.75
2,828
27.35
2,594
27.13
684
6.62
578
6.04
1,353
13.09
376
3.93
278
2.68
339
3.55
Other current assets
1,568
15.17
2,087
21.82
Other non current assets
1,390
13.45
1,436
15.01
10,340
100.00
9,563
100.00
8,239
79.68
7,537
78.81
Redeemable Preference Shares
16
0.16
18
0.19
Long term borrowings
20
0.19
24
0.25
Short term borrowings
6
0.06
19
0.20
Other current liabilities
1,706
16.50
1,578
16.50
Other non-current liabilities
249
2.41
266
2.79
Minority Interest
104
1.00
121
1.26
Total Liabilities
10,340
100.00
9,563
100.00
Intangible assets and Goodwill
Accounts Receivable
Unbilled Revenues
Investments
Cash and Cash equivalents
Total assets
Liabilities and Shareholders' Equity
Shareholders' Funds
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24

25. Indian GAAP Income Statement - Consolidated
Consolidated Indian GAAP
` Crore
% of Revenue
Q3 FY14
Q2 FY14
Q3 FY13
Q3 FY14
Q2 FY14
Q3 FY13
20,912
20,533
15,663
98.21
97.88
97.47
382
444
407
1.79
2.12
2.53
21,294
20,977
16,070
100.00
100.00
100.00
a) Salaries & Wages
7,704
7,610
6,142
36.18
36.27
38.22
b) Overseas business expenditure
3,039
2,913
2,194
14.27
13.89
13.66
c) Other operating expenses
3,864
3,821
3,074
18.15
18.22
19.12
14,607
14,344
11,410
68.60
68.38
71.00
6,687
6,633
4,660
31.40
31.62
29.00
7
12
8
0.03
0.06
0.05
350
328
277
1.64
1.57
1.72
6,330
6,293
4,375
29.73
29.99
27.23
221
3.21
INCOME
a) IT & Consultancy Services
b) Manufacturing, Sale of equipment and Licences
Total Income
EXPENDITURE
Total Expenditure
Profit Before Interest, Depreciation, Taxes
& Other Income
Interest
Depreciation
Profit Before Taxes & Other Income
Other income (expense), net
683
(26)
(0.12)
1.37
Profit Before Taxes
7,013
6,267
4,596
32.94
29.87
28.60
Provision For Taxes
1,636
1,595
1,005
7.68
7.60
6.26
Profit After Taxes & Before Minority Interest
5,377
4,672
3,591
25.26
22.27
22.34
44
39
41
0.21
0.18
0.25
5,333
4,633
3,550
25.05
22.09
22.09
Minority Interest
Net Profit
16th Jan 2014
25

26. Indian GAAP Balance Sheet - Consolidated
Consolidated Indian GAAP
` Crore
%
31-Dec-13
31-Mar-13
31-Dec-13
31-Mar-13
48,696
38,646
95.84
95.23
Minority Interest
666
695
1.31
1.71
Loan Funds
132
211
0.26
0.52
Deferred Tax Liability
301
235
0.59
0.58
1,018
796
2.00
1.96
50,813
40,583
100.00
100.00
Fixed Assets (net)
9,671
8,142
19.03
20.06
Goodwill
2,314
3,582
4.56
8.83
399
310
0.79
0.76
8,206
1,897
16.15
4.68
6,585
6,769
12.96
16.68
Current Assets, Loans and Advances
26,606
23,700
52.36
58.40
Current Liabilities and Provisions
11,334
11,585
22.31
28.55
Net Current Assets
21,857
18,884
43.01
46.53
Non Current Assets
8,366
7,768
16.46
19.14
50,813
40,583
100.00
100.00
Source of Funds
Shareholders' Funds
Non Current Liabilities
Total Liabilities
Application of Funds
Deferred Tax Asset
Investments
Cash and Bank Balance
Total Assets
16th Jan 2014
26

27. Currency mix and average realized rates in INR
Currency
Average rates
Q3 FY14
Q2 FY14
% of Revenue
Q3 FY14
Q2 FY14
USD
61.94
62.86
56.75%
57.38%
GBP
100.86
98.11
15.43%
15.20%
EUR
84.78
83.89
9.07%
8.52%
18.75%
18.90%
100.00%
100.00%
Others
16th Jan 2014
27

28. Thank You